Instead, we see Venezuela as another example of what scholars call the “resource curse.” That’s the unfortunate correlation first described by the British economic geographer Richard M. Auty between nations with vast wealth from oil or other natural resources and political instability.

Venezuela is a textbook case of the curse, since nearly 90 percent of its people are now living in poverty in the country with the world’s largest oil reserves. After decades of leaders who failed to harness this commodity for peace and prosperity, it is questionable whether a new government can do a better job.

Only a few oil- and natural gas-rich countries, such as the United States, Canada and Norway have avoided this curse – in part because they built solid institutions and diverse economies before their petroleum drilling began.

The resource curse

The resource curse has afflicted many Latin American countries with profligate and populist elected leaders who succumbed to the temptations of corruption and reckless spending when easy money poured in, followed by right-wing dictatorships imposing repressive technocracies. Oil and wealth from other commodities like gold and copper, and foreign aid, have also supported kleptocrats and dictatorships who have often used their fortunes to retain power in other regions.

The scholars Terry Karl and Thad Dunning have persuasively argued that oil export revenue helped sustain Venezuelan democracy from the 1950s to the early 1980s. The government, they explained, could buy support from the elite with lower taxes and from the poor with social programs.

But when crude prices fall, the loss of revenue polarizes politics as the wealthy and the poor fight over the reduced proceeds. And when these countries not only rely on one export but also very limited markets, that adds to their vulnerability.

Boom and bust

After several decades of strong economic performance backed by comparatively impressive social programs, Venezuela’s economy started to sputter in the 1980s. The vast sums of money it had borrowed a decade earlier, backed by future oil revenues, were coming due by that time.

Popular anger against economic conditions and the dominant political class led voters to back more polarizing politicians. The first coup attempt against Pérez in 1992 was organized by Hugo Chávez, then a lieutenant-colonel, who famously exclaimed to the nation that he had failed “for now.”

Building support

Luckily for Chávez, oil prices had started to rise again, eventually reaching record levels while he was in power. Aside from a brief downturn brought on by the Great Recession, those high oil prices raised enough revenue to help sustain his support.

When Chávez appointed allies to prominent posts at PDVSA in 2002, dissident members of the military and radicalized leaders of the Venezuelan Federation of Chambers of Commerce staged a coup attempt that ultimately failed to oust him.

On top of his misfortune to be leading Venezuela during an oil price slump, Maduro has turned out to be even worse at managing the oil industry than Chávez. He installed military cronies as managers, led by Manuel Quevedo, a major general in Venezuela’s National Guard.

The increased social and economic upheaval has even led many poor people to withdraw their allegiance to Maduro. Amid the turmoil, the U.S. and many other countries are recognizing opposition leader Juan Guaidó, as the nation’s legitimate president.

Whether or not Guaidó manages to dislodge Maduro’s grip on power, the country’s turbulent history suggests that long-term success will require much more than removing its current embattled leader. Any future leaders must also build the coalitions and institutions necessary to break the resource curse and thus empower Venezuela to finally draw social and economic stability from its oil wealth.

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